NEW DELHI: India is leading a group of emerging economies in reshaping global energy market dynamics, taking up the baton from China by becoming the main engine of demand growth on the back of rapid economic strides, the International Energy Agency said on Wednesday.
According to IEA’s World Energy Outlook 2025, India will be the top contributor to growth in oil demand and second largest in coal consumption — mostly for generating power — by 2035.
But by the terminal year of the outlook, the report said, more than half of the country’s electricity production will come from non-fossil fuel sources, which will make up 95% of capacity addition.
Almost half of the additional barrels pouring into the market by 2035 will flow towards India as the country’s consumption rises from 5.5 million barrels a day to 8 million because of expanding car ownership, rising demand for plastics, chemicals and aviation, the report said.
“Between 2010 and 2024, its GDP growth rate was second only to that of China among major countries and regions. In the period to 2035, GDP grows on average by 6.1% each year in India, which is more than any other major country of region, and its GDP per capita is 75% higher in 2035 than today,” the report said.
But being the prime driver of oil demand growth and rising oil, gas and coal consumption, the report said, share of non-fossil sources in installed generation capacity is expected to rise to 60% in 2030 and 70% in 2035, thanks to the ambitious green energy target of 500 gigawatts by 2030 pursued by the government.
“In 2015, every dollar invested in fossil power generation sources in India was broadly matched by a dollar invested in non-fossil sources, a 1:1 ratio. By 2025, this ratio had increased to 1:4 in favour of non-fossil sources,” the report said.
The report put India’s growing hunger for energy in perspective by pointing out, “India adds the equivalent of one Bengaluru annually to its urban population, and its built floor space expands by 40%. It said India adds nearly 12,000 cars to its roads daily and is projected to add over 250 million air conditioners to its homes over the next decade.”
The report also cautions by saying the “traditional energy risks are now accompanied by vulnerabilities in other areas – most visibly in supply chains for critical minerals, which are vital for power grids, batteries, EVs and more. A single country is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%, it said without naming China.
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